Rising fees at public hospitals hit patients hard

FOR 10 years the government has neglected to adjust the means test for patients using public hospitals, leaving more and more poor people without medical aid to foot their own bills.

Patients have been hit with a double whammy as treatment and hospital fees have risen by up to 75% since the means test was first set in 2002. As a result, many families that have had to contend with serious illness have been saddled with debts that can take years to pay off.

"When I had surgery in 2006 for colon cancer, I got a bill for R9,500," says Margaret Sass, a retired schoolteacher from Strandfontein who survives on a R3,500 monthly pension.

She arranged with Groote Schuur Hospital to settle her debt over four years, paying a few hundred rand at a time. Mrs Sass had barely handed over her last instalment when she was diagnosed with liver cancer and needed another operation.

The November 2010 procedure was a success and her cancer is in remission, but she is still paying off the R11,500 bill and fees charged for follow-up visits. "We pensioners don’t mind paying for services, but it’s become almost unaffordable," says Ms Sass, who expects to take more than two years to clear her outstanding debt of almost R8,000.

Between 4-million and 6-million South Africans have no medical aid insurance and do not qualify for discounted fees at public hospitals, putting them at risk of huge medical bills, estimates health economist Alex van den Heever, who based his calculation on the 2011 General Household Survey.

"Not even a mid-income person can afford public hospital care on an out-of-pocket basis for trauma or major medical conditions … it can be catastrophic," Prof van den Heever says. "The problem is that medical scheme membership is not mandatory, so anyone who decides not to join is exposed," he says.

While public sector treatment for a condition such as breast cancer costs less than in the private sector, those who are liable to pay still face bills running to hundreds of thousands of rand, he says.

Public hospital fees are set out in the Department of Health’s Uniform Patient Fee Schedule, which classifies patients into three groups. Those who earn more than R6,000 a month and pay in full; those who earn less than the threshold and qualify for subsidy; and those who are formally unemployed or dependent on state grants and receive free healthcare.

If inflation over the past decade was factored in, the upper threshold should today be in the region of R10,500, according to Reserve Bank economist Ian Venter.

The freezing of the threshold is drawing increasing numbers of people earning lower and lower real incomes into the full-fee net, says health economist Diane McIntyre from the University of Cape Town. The fees levied by public hospitals have increased considerably since 2002, but were last adjusted in 2007, according to Dr Anban Pillay, the Department of Health’s deputy director-general for health regulation and compliance.

Dr Pillay concedes that the Uniform Patient Fee Schedule classification of patients has not kept pace with inflation, and says a task team has been appointed to look at the issue.

Most provincial health departments are in such administrative disarray that individuals rarely get billed, and public hospitals have only modest success in getting the big insurers to pay, he says. With the exception of the Western Cape, public hospitals have little incentive to collect outstanding debts as they do not retain any of the revenue.

"I have never even heard of a patient in Gauteng getting a letter of demand," says the Democratic Alliance’s Jack Bloom. "The province can’t even bill medical aids and the Road Accident Fund. No one pays attention to individual patients."

But in the Western Cape, which arguably boasts South Africa’s most efficient health department, patients are expected to pay. Those who do not are handed over to debt collectors.

"All patients are informed that if they can’t pay their account, they must provide full information regarding their income and assets and the department will consider reaching an accommodation," says Western Cape head of health Prof Craig Househam. "In many cases there is a significant reduction in the amount payable, and people can pay off over a period of time."

His department collected R305m from public hospital patients in the 2011-12 fiscal year, R55m of which came from patients’ own pockets.

It wrote off another R229m in bad debts, of which R189m was attributable to patients without cover from medical aid or the Road Accident Fund.

While patient fees constitute a relatively small part of the department’s R14.6bn operating budget, they can become a major concern for liable individuals.

"It is quite a strain," says Strandfontein resident Gail Small, whose husband is a self-employed boiler maker with irregular income. She was diagnosed with lymphoma four years ago and though her cancer is in remission, she still requires regular checkups, which come at a cost. The hospital allowed her to pay in instalments, but it has at times been hard to find the money, she says.

The Uniform Patient Fee Schedule policy says patients who cannot afford the fees levied according to their classification "may be reclassified" as exempt from fees "by the person in charge of the health facility", enabling hospitals to write off part or all of a patient’s debt.

But many patients have neither the energy or skills to navigate the bureaucracy, and staff do not always verify patient claims, leaving the process open to corruption.

In the long run, the state’s plans to introduce National Health Insurance (NHI), which would be free at the point of service, should do away with the financial burden facing public sector patients.

But in the short term, the NHI plan could inadvertently make things worse.

This is because the NHI pilot project includes funding to improve hospitals’ revenue collection. If that aspect of the project is not carefully managed, many more patients could find themselves in the same financial straits as Mrs Sass.

In this article

FOR 10 years the government has neglected to adjust the means test for patients using public hospitals, leaving more and more poor people without medical aid to foot their own bills.

Patients have been hit with a double whammy as treatment and hospital fees have risen by up to 75% since the means test was first set in 2002. As a result, many families that have had to contend with serious illness have been saddled with debts that can take years to pay off.

"When I had surgery in 2006 for colon cancer, I got a bill for R9,500," says Margaret Sass, a retired schoolteacher from Strandfontein who survives on a R3,500 monthly pension.

She arranged with Groote Schuur Hospital to settle her debt over four years, paying a few hundred rand at a time. Mrs Sass had barely handed over her last instalment when she was diagnosed with liver cancer and needed another operation.

The November 2010 procedure was a success and her cancer is in remission, but she is still paying off the R11,500 bill and fees charged for follow-up visits. "We pensioners don’t mind paying for services, but it’s become almost unaffordable," says Ms Sass, who expects to take more than two years to clear her outstanding debt of almost R8,000.

Between 4-million and 6-million South Africans have no medical aid insurance and do not qualify for discounted fees at public hospitals, putting them at risk of huge medical bills, estimates health economist Alex van den Heever, who based his calculation on the 2011 General Household Survey.

"Not even a mid-income person can afford public hospital care on an out-of-pocket basis for trauma or major medical conditions … it can be catastrophic," Prof van den Heever says. "The problem is that medical scheme membership is not mandatory, so anyone who decides not to join is exposed," he says.

While public sector treatment for a condition such as breast cancer costs less than in the private sector, those who are liable to pay still face bills running to hundreds of thousands of rand, he says.

Public hospital fees are set out in the Department of Health’s Uniform Patient Fee Schedule, which classifies patients into three groups. Those who earn more than R6,000 a month and pay in full; those who earn less than the threshold and qualify for subsidy; and those who are formally unemployed or dependent on state grants and receive free healthcare.

If inflation over the past decade was factored in, the upper threshold should today be in the region of R10,500, according to Reserve Bank economist Ian Venter.

The freezing of the threshold is drawing increasing numbers of people earning lower and lower real incomes into the full-fee net, says health economist Diane McIntyre from the University of Cape Town. The fees levied by public hospitals have increased considerably since 2002, but were last adjusted in 2007, according to Dr Anban Pillay, the Department of Health’s deputy director-general for health regulation and compliance.

Dr Pillay concedes that the Uniform Patient Fee Schedule classification of patients has not kept pace with inflation, and says a task team has been appointed to look at the issue.

Most provincial health departments are in such administrative disarray that individuals rarely get billed, and public hospitals have only modest success in getting the big insurers to pay, he says. With the exception of the Western Cape, public hospitals have little incentive to collect outstanding debts as they do not retain any of the revenue.

"I have never even heard of a patient in Gauteng getting a letter of demand," says the Democratic Alliance’s Jack Bloom. "The province can’t even bill medical aids and the Road Accident Fund. No one pays attention to individual patients."

But in the Western Cape, which arguably boasts South Africa’s most efficient health department, patients are expected to pay. Those who do not are handed over to debt collectors.

"All patients are informed that if they can’t pay their account, they must provide full information regarding their income and assets and the department will consider reaching an accommodation," says Western Cape head of health Prof Craig Househam. "In many cases there is a significant reduction in the amount payable, and people can pay off over a period of time."

His department collected R305m from public hospital patients in the 2011-12 fiscal year, R55m of which came from patients’ own pockets.

It wrote off another R229m in bad debts, of which R189m was attributable to patients without cover from medical aid or the Road Accident Fund.

While patient fees constitute a relatively small part of the department’s R14.6bn operating budget, they can become a major concern for liable individuals.

"It is quite a strain," says Strandfontein resident Gail Small, whose husband is a self-employed boiler maker with irregular income. She was diagnosed with lymphoma four years ago and though her cancer is in remission, she still requires regular checkups, which come at a cost. The hospital allowed her to pay in instalments, but it has at times been hard to find the money, she says.

The Uniform Patient Fee Schedule policy says patients who cannot afford the fees levied according to their classification "may be reclassified" as exempt from fees "by the person in charge of the health facility", enabling hospitals to write off part or all of a patient’s debt.

But many patients have neither the energy or skills to navigate the bureaucracy, and staff do not always verify patient claims, leaving the process open to corruption.

In the long run, the state’s plans to introduce National Health Insurance (NHI), which would be free at the point of service, should do away with the financial burden facing public sector patients.

But in the short term, the NHI plan could inadvertently make things worse.

This is because the NHI pilot project includes funding to improve hospitals’ revenue collection. If that aspect of the project is not carefully managed, many more patients could find themselves in the same financial straits as Mrs Sass.

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